EXHIBIT 10.105
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of the 15th day of October, 1999, is made by and between
SPACEHAB, INCORPORATED, a Washington corporation ("SPACEHAB"), ASTROTECH SPACE
OPERATIONS, INC., a Delaware corporation ("Astrotech"; together with SPACEHAB,
the "Original Borrowers"), and JOHNSON ENGINEERING CORPORATION, a Colorado
corporation ("Johnson"; Johnson, Astrotech and SPACEHAB are also referred to
individually as a "Borrower" and collectively as the "Borrowers") and FIRST
UNION NATIONAL BANK, a national banking association, successor by merger to
Signet Bank, a Virginia banking corporation (the "Lender").
RECITALS
A. The Lender and the Original Borrowers, entered into a Loan and Security
Agreement dated as of the 16th day of June, 1997 (as amended through the date
hereof, the "Agreement") pursuant to which the Lender has agreed to extend
credit to the Original Borrowers, and the Original Borrowers have agreed to
obtain credit from the Lender, on the terms and conditions set forth in such
Agreement.
B. SPACEHAB has acquired all the outstanding stock of Johnson and the Original
Borrowers have requested that the Lender modify the Agreement to include Johnson
as an additional borrower and make certain other modifications to the Agreement.
Johnson desires to become a party to the Loan Documents and assume the
obligations of a Borrower. The Lender has consented to the Borrowers' requests,
subject to the execution of this Amendment and the satisfaction of the
conditions specified herein.
C. The Borrowers and the Lender now desire to execute this Amendment to set
forth their agreements with respect to the modifications to the Agreement.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lender and the Borrowers agree
as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment
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and not defined herein are defined in the Agreement.
SECTION 2. Amendments to Agreement. The Agreement is hereby amended
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as follows:
2.1 Amendments to Section 1. Section 1 of the Agreement is amended
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as follows:
2.0(1) Borrowing Base. The following definition of the
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term Borrowing Base is hereby inserted in the proper alphabetical location in
Section 1:
"Borrowing Base" means, at the time in question, the sum of (a) 75% of
Eligible Billed Government Receivables and (b) 75% of Eligible Billed
Commercial Receivables as depicted in the Borrowing Base Certificate the
Lender has most recently received pursuant to Section 2.1(d) or Section
5.8(j) provided, however, that (i) the Borrowing Base shall be reduced by
the Letter of Credit
Exposure at such time and (ii) at all times the Borrowing Base shall remain
subject to verification by the Lender.
2.0(2) Borrowing Base Certificate. The following
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definition of the term Borrowing Base Certificate is hereby inserted in the
proper alphabetical location in Section 1:
"Borrowing Base Certificate" means a certificate of the Borrowers
substantially in the form attached hereto as Exhibit A-1 (or such
subsequent form as the Lender shall require) containing a computation of
the Borrowing Base as of the date depicted therein and a certification that
no Default or Event of Default has occurred and is continuing.
2.0(3) Commercial Customer. The following definition of
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the term Commercial Customer is hereby inserted in the proper alphabetical
location in Section 1:
"Commercial Customer" means any Customer other than the Government.
2.0(4) Eligible Billed Commercial Receivable. The following
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definition of the term Eligible Billed Commercial Receivable is hereby inserted
in the proper alphabetical location in Section 1:
"Eligible Billed Commercial Receivable" means any Eligible Billed
Receivable which does not arise out of a prime contract between a Borrower
and the Government; provided that, for so long as (i) more than 50% of the
Eligible Receivables due from any individual Commercial Customer or group
of Commercial Customers which are Affiliates of each other remains unpaid
for more than 90 days following the date of initial invoice to such
Commercial Customer(s) for such Eligible Receivables or (ii) any Commercial
Customer or an Affiliate of a Commercial Customer is obligated to a
Borrower pursuant to a promissory note or other agreement entered into by
such Commercial Customer or Affiliate in lieu of payment of an Account
Receivable, then no Accounts Receivable of such Commercial Customer(s) may
be included as Eligible Billed Commercial Receivables.
2.0(5) Eligible Billed Government Receivable. The following
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definition of the term Eligible Billed Government Receivable is hereby inserted
in the proper alphabetical location in Section 1:
"Eligible Billed Government Receivable" means any Eligible Billed
Receivable which arises out of a prime contract between a Borrower and the
Government.
2.0(6) Eligible Billed Receivable. The following definition
--------------------------
of the term Eligible Billed Receivable is hereby inserted in the proper
alphabetical location in Section 1:
"Eligible Billed Receivable" means any Eligible Receivable that has
been billed to the appropriate Customer and is aged less than 90 days from
the date of the initial invoice.
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2.0(7) Eligible Receivable. The following definition of the
-------------------
term Eligible Receivable is hereby inserted in the proper alphabetical location
in Section 1:
"Eligible Receivable" means any Account Receivable of a Borrower (a)
that represents valid obligations of a Customer to make payment to such
Borrower for goods shipped or delivered or services completed under valid,
written contracts of sale or service entered into by such Borrower in the
ordinary course of its business; (b) on which the Customer is not an
Affiliate, shareholder, employee, director, or officer of a Borrower or a
family member of any such Person; (c) with respect to which the Borrowers
have no knowledge or notice of any inability of the Customer to make full
payment; (d) from the face amount of which has been deducted all payments,
set-offs, contras, amounts subject to adverse claims made in writing to a
Borrower, contractual allowances, bad debt reserves, prompt payment
discounts and other credits applicable thereto; (e) that is subject to no
Liens other than those permitted by this Agreement; (f) that continues to
be in full conformity with the representations and warranties made by the
Borrowers to the Lender in this Agreement with respect thereto; (g) with
respect to which the Lender is and continues to be satisfied with the
credit standing of the Customer; (h) on which the Customer is not a foreign
government or an entity organized and existing under the laws of a country
other than the United States; (i) which is not an Excluded Government Final
Invoice Receivable; (j) which is not an Account Receivable the payment for
which flows through an escrow account from which any Person other than such
Borrower is entitled to payment; (k) which does not arise from a contract
on which such Borrowers' performance is assured by a performance,
completion or other bond; (1) which is payable in U.S. Dollars (or if not
is backed by a letter of credit acceptable to the Lender); (m) which is not
subject to repurchase or return such as bill and hold, sale or return, sale
on approval, consignment, guaranteed sale, etc.; (n) which is not evidenced
by chattel paper or an instrument; and (o) which is not subject to any
funding contingency or could otherwise be classified as "at-risk" work;
provided, however, and without limiting any other provisions of this
Agreement with respect to the exclusion of Accounts Receivable from the
category of Eligible Receivables and the Borrowing Base, that if the Lender
reasonably determines that the collectability of any Account Receivable
makes it unacceptable for inclusion in the Borrowing Base and gives written
notice to the Borrowers indicating the reasons for such determination, then
such Account Receivable shall thereafter be excluded from the category of
Eligible Receivables. The following are examples of Accounts Receivable (or
portions thereof) that the Lender does not normally find acceptable for
inclusion in the Borrowing Base, and no such Account Receivable (or the
specified portion thereof) shall be includable in the Borrowing Base
without the advance written approval of the Lender: (i) Accounts Receivable
that the Lender does not consider to be trade Accounts Receivable (such as
lease payments or notes receivable from account debtors given in
satisfaction of prior Account Receivable obligations); (ii) Accounts
Receivable which, in the Lender's judgment, a Borrower should not
reasonably expect to collect within 90 days from the date of original
invoice; (iii) that portion of any Account Receivable constituting
retainage that has been withheld by the account debtor pending completion
of the contract; and (iv) that portion of any Account Receivable
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constituting a service charge or similar charge imposed by a Borrower for
the extension of credit to the account debtor.
2.0(8) Financial Reporting Month. The following definition
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of the term Financial Reporting Month is hereby inserted in the proper
alphabetical location in Section 1:
"Financial Reporting Month" means a calendar month or such other
substantially equivalent financial reporting period adopted by a Borrower
and approved by the Lender.
2.0(9) Maximum Amount. The definition of the term Maximum
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Amount is hereby amended and restated in its entirety as follows:
"Maximum Amount" means, at any time, the lesser of (a) the difference
between $10,000,000 and the Letter of Credit Exposure as of such time and
(b) the then applicable Borrowing Base.
2.0(10) Termination Date. The definition of the term
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Termination Date is hereby amended and restated in its entirety as follows:
"Termination Date" means January 31, 2000, and any extension or
extensions thereof granted by the Lender in its sole discretion.
2.2 Amendments to Section 2.
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2.0(1) Section 2.1(a). Section 2.1(a) is hereby amended
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and restated in its entirety as follows:
(a) Subject to the terms and conditions of this Agreement, including
the receipt of an Advance Request therefor, the Lender agrees to make Loans
to the Borrowers (through SPACEHAB as their agent) from time to time until
the Termination Date unless, after giving effect to any such Loan (i) the
Principal Amount would exceed the Maximum Amount, (ii) the Borrowers then
have, or as a result of such Loan would have, an obligation to prepay any
Loan, or (iii) the Borrowers then have, or as a result of such Loan would
have, an obligation to provide additional collateral to the Lender pursuant
to Section 2.1(b) hereof; provided, however that, for the purposes of all
such calculations, Loans to be repaid by Loans to be advanced on such date
shall be excluded from the Principal Amount. Subject to the foregoing
limitations, the Borrowers (acting through SPACEHAB as their agent) may
borrow, repay without penalty and re-borrow hereunder from the date hereof
until the Termination Date.
2.0(2) Section 2.1(b). Section 2.1(b) is hereby amended
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and restated in its entirety as follows:
(b) If the Principal Amount exceeds the Maximum Amount, the Borrowers
shall immediately prepay the Loans to the extent necessary to reduce such
excess. If after such prepayment the Letter of Credit Exposure exceeds the
sum of (a) 75%
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of Eligible Billed Government Receivables and (b) 75% of Eligible Billed
Commercial Receivables as depicted in the Borrowing Base Certificate the
Lender has most recently received pursuant to Section 2.1(d) or Section
5.8(j), the Borrowers shall immediately deliver to the Lender such
additional collateral as the Lender shall deem necessary to adequately
secure the Borrowers' obligations with respect to such Letter of Credit
Exposure.
2.0(3) Section 2.1(d). Section 2.1(d) is hereby amended
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and restated in its entirety as follows:
(d) The Borrowers may request that a Loan be made by submitting an
Advance Request which, at the option of the Lender, shall be accompanied by
a current Borrowing Base Certificate. Each Advance Request (and Borrowing
Base Certificate, if applicable) must be received by the Lender not later
than 1:00 p.m. (Washington, D.C. time) on the date on which the Loan
requested thereby is to be made. Advance Requests (and Borrowing Base
Certificates, if applicable) may be transmitted by telecopy to the Lender
at (703) 760-5450 or such other number as the Lender may designate in
written notice to the Borrowers. If an Advance Request (and Borrowing Base
Certificate, if applicable) is transmitted by telecopy, the Borrowers shall
maintain the original of such Advance Request (and Borrowing Base
Certificate, if applicable) as a permanent record for so long as any of the
Obligations remain outstanding and shall allow the Lender to inspect such
Advance Request (and Borrowing Base Certificate, if applicable) and shall
provide copies of such original to the Lender upon its request therefor.
The proceeds of a Loan will be credited to the Operating Account. Loans may
be requested by those individuals designated by SPACEHAB from time to time
in written instruments delivered to the Lender; provided, however, that the
Borrowers shall remain liable with respect to any Loan disbursed by the
Lender in good faith hereunder, even if such a Loan is requested by an
individual who has not been so designated. The Borrowers agree to confirm
in writing from time to time, when and as requested by the Lender, the
purpose for which the proceeds of each Loan were used.
2.3 Amendments to Section 4.
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1.2(1) Section 4.17. The following is hereby inserted as
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a new Section 4.17.
4.17. Integrated Business. The Borrowers will be engaged as an
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integrated group in providing services and goods to their respective Customers.
The integrated operation will require financing on a basis such that credit be
supplied to the Borrowers based on the consolidated assets of the Borrowers, as
required for the successful operation of the Borrowers separately, and the
integrated operation as a whole. In that connection, the Borrowers will request
that the Lenders provide the Loans to, and issue the Letters of Credit for the
account of, SPACEHAB, as agent for the Borrowers, to finance such operation.
Each Borrower will derive benefit, directly and indirectly, from the credit so
extended to the Borrowers, both in its, separate capacity and as a member of the
integrated group.
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2.4 Amendments to Section 5.
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1.3(1) Section 5.8(j). The following is hereby inserted
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as a new Section 5.80):
(j) Borrowing Base Certificate and Accounts Receivable Detail. On or
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before the tenth (10th) day of each Financial Reporting Month, a Borrowing Base
Certificate appropriately completed and executed by the chief financial officer
of each Borrower, the Treasurer of each Borrower or such other financial officer
of each Borrower as is acceptable to the Lender and including a computation of
the Borrowing Base as of the last day of the previous Financial Reporting Month,
accompanied by (i) schedules of all outstanding Accounts Receivable as of the
last day of the previous Financial Reporting Month showing the age of such
Accounts Receivable from the date of original invoice in intervals of not more
than thirty (30) days, (ii) such other supporting documents to the schedules as
Lender may from time to time reasonably request, and (iii) such invoices,
instruments, chattel paper and other evidences of indebtedness representing any
Accounts Receivable, duly endorsed in blank or to the Lender, as the Lender may
request; and
2.1(4) Section 5.8(k). The following is hereby inserted
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as a new Section 5.8(k):
(k) Contract Backlog Report. If requested by the Lender, reports
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relating to the Accounts Receivable included in any Borrowing Base Certificate
setting forth a description of contracts giving rise to such Accounts
Receivable, the percentage of completion of the work to be performed with
respect to such contracts, the amounts billed under such contracts and the
amounts remaining to be billed, in form and detail satisfactory to the Lender.
2.1(5) Section 5.12. Section 5.12 is hereby amended and
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restated in its entirety as follows:
(a) Minimum Tangible Net Worth. Cause Tangible Net Worth to be at
--------------------------
least $60,000,000.00. The Lender shall calculate Tangible Net Worth for the
purpose of measuring the Borrowers' compliance with foregoing covenant using
information contained in the consolidated balance sheet of SPACEHAB included in
each Form 10-Q or Form 10-K that the Borrowers are required to deliver to the
Lender under this Agreement.
(b) Current Ratio. Cause the Current Ratio to be at least 1.2 to 1.
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The Lender shall calculate the Current Ratio for the purpose of measuring the
Borrowers' compliance with foregoing covenant using information contained in the
consolidated financial statements of SPACEHAB included in each Form 10-Q or Form
10-K that the Borrowers are required to deliver to the Lender under this
Agreement.
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2.5 Amendments to Exhibits.
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1.4(1) Exhibit A-1. Exhibit A-1 attached hereto is hereby
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inserted as Exhibit A-1 to the Agreement.
SECTION 3. Representations and Warranties of the Borrowers.
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Each Borrower represents and warrants to the Lender that:
(a) It has the power and authority to enter into and to
perform this Amendment, to execute and deliver all documents relating to
this Amendment, and to incur the obligations provided for in this
Amendment, all of which have been duly authorized and approved in
accordance with such Borrower's corporate documents;
(b) This Amendment, together with all documents executed
pursuant hereto, shall constitute when executed the valid and legally
binding obligations of the Borrowers in accordance with their respective
terms;
(c) Except with respect to events or circumstances
occurring subsequent to the date thereof and known to the Lender, all
representations and warranties made in the Agreement are true and correct
as of the date hereof, with the same force and effect as if all
representations and warranties were fully set forth herein;
(d) Each Borrower's obligations under the Loan Documents
remain valid and enforceable obligations, and the execution and delivery of
this Amendment and the other documents executed in connection herewith
shall not be construed as a novation of the Agreement or any of the other
Loan Documents; and
(e) As of the date hereof, no Borrower has any offsets or
defenses against the payment of any of the Obligations.
SECTION 4. Waiver of Claims. As a specific inducement to
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the Lender without which the Borrowers acknowledge the Lender would not
enter into this Amendment and the other documents executed in connection
herewith, the Borrowers hereby waive any and all claims that they may have
against the Lender, as of the date hereof, arising out of or relating to
the Agreement or any other Loan Document whether sounding in contract, tort
or any other basis.
SECTION 3. Conditions of Effectiveness. This Amendment shall become
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effective when, and only when, the Borrowers have executed and completed this
Amendment, have delivered this Amendment to the Lender and have reimbursed the
Lender for the Lender's costs and expenses incurred in connection with the
Amendment, but upon the occurrence of such conditions, this Amendment shall be
deemed to be effective as of October 15, 1999.
SECTION 4. Provisions Regarding Joinder of Johnson.
---------------------------------------
(a) Johnson hereby acknowledges, agrees and confirms that, by its
execution of this Amendment, it will be deemed to be a party to the Agreement
and the other Loan Documents and a "Borrower" for all purposes thereof, and
shall have all of the obligations of a Borrower
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thereunder as if it had executed the such documents. Johnson hereby ratifies, as
of the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Agreement and the other Loan Documents, including
without limitation all of the undertakings and waivers set forth therein.
(b) Each Borrower hereby agrees, as between it and any other
Borrower, that if any other Borrower shall become an Excess Contributing
Borrower (as defined below) by reason of the payment by such Borrower of any
Obligations, the Borrower shall, on demand of such Excess Contributing Borrower
(but subject to the next sentence), pay to each Excess Contributing Borrower an
amount equal to such Borrower's Pro Rata Share (as defined below and determined,
for this purpose, without reference to the assets, debts and liabilities of such
Excess Contributing Borrower) of the Excess Payment (as defined below) in
respect of such Obligations. The payment obligation of the Borrower to any
Excess Contributing Borrower hereunder shall be subordinate and subject in right
of payment to the prior payment in full of the Obligations, and no Excess
Contributing Borrower shall exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of Obligations. For
purposes hereof, (1) "Excess Contributing Borrower" shall mean, in respect of
any Obligations, a Borrower that has paid an amount in excess of its Pro Rata
Share of such Obligations; (2) "Excess Payment" shall mean, in respect of any
Obligations, the amount paid by an Excess Contributing Borrower in excess of its
Pro Rata Share of such Obligations; and (3) "Pro Rata Share" shall mean, for any
Borrower, the ratio (expressed as a percentage) of (i) the amount by which the
aggregate present fair saleable value of all assets of such Borrower (excluding
any shares of stock of any other Borrower) exceeds the amount of all the debts
and liabilities of such Borrower (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of the Borrower with
respect to the Obligations and any obligations of any other Borrower that have
been guaranteed by the Borrower) to (ii) the amount by which the aggregate fair
saleable value of all assets of the Borrowers exceeds the amount of all the
debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the Obligations) of the Borrowers, all
as of the date hereof. If any other Person becomes a Borrower subsequent to the
date hereof, then for purposes of this Section, such Person shall be deemed to
have been a Borrower as of the date hereof, and the aggregate present fair
saleable value of the assets, and the amount of the debts and liabilities, of
such Person as of the date hereof shall be deemed to be equal to such value and
amount on the date such Person becomes a Borrower.
(c) In any action or proceeding involving any state corporate law, or
any state or Federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of a Borrower
with respect to the Obligations would otherwise, taking into account the
provisions of this Section, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability with respect to the Obligations, then,
notwithstanding any other provision of the Loan Documents to the contrary, the
amount of such liability shall, without any further action by the Borrower, the
Lender, or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
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SECTION 5. Miscellaneous.
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5.1 Reference To Agreement. Upon the effectiveness of this Amendment,
----------------------
each reference in the Agreement to "this Agreement" and each reference in the
other Loan Documents to the Agreement, shall mean and be a reference to the
Agreement as amended hereby.
4.1 Effect on Loan Documents and Accrued and Unpaid Interest,
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Fees and Other Charges. Except as specifically amended above, the
----------------------
Agreement and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed. Without limiting the
generality of the foregoing, all Collateral given to secure the Obligations
of the Borrowers under the Agreement and the other Loan Documents prior to
the date hereof does and shall continue to secure all Obligations of the
Borrowers under the Agreement, as amended hereby and the other Loan
Documents, and, except as provided in the Agreement and the other Loan
Documents, no such Collateral shall be released until all conditions to
such release contained in the Loan Documents are satisfied. Any interest,
fees and other charges due under the Agreement which have accrued and
remain unpaid as of the effective date of this Amendment shall be paid on
the next succeeding date that any such charge which has accrued on or after
the effective date of this Amendment is due under the Agreement, as amended
hereby, unless any such charge is discontinued by this Amendment, in which
event the Borrowers shall pay the accrued and unpaid portion thereof upon
execution of this Amendment.
5.2 No Waiver. The execution, delivery and effectiveness of this
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Amendment shall not operate as a waiver of any right, power or remedy of the
Lender under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents.
5.3 Costs, Expenses and Taxes. The Borrowers agree to pay on demand
-------------------------
all costs and expenses of the Lender in connection with the preparation,
reproduction, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder, including the reasonable fees and out-
of-pocket expenses of counsel for the Lender with respect thereto.
4.2 Governing Law. This Amendment shall be governed by and
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construed in accordance with the laws of the Commonwealth of Virginia,
without giving effect to conflict of law provisions.
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IN WITNESS WHEREOF, the Borrowers and the Lender have caused this
Amendment to be signed by their duly authorized representatives under seal all
as of the day and year first above written.
SPACEHAB, INCORPORATED, a Washington
Corporation
By: ________________________________
ATTEST: Name: ________________________________
___________________ Title: ________________________________
(Asst.) Secretary
[corporate seal]
ASTROTECH SPACE OPERATIONS, INC., a
Delaware Corporation
By: ________________________________
ATTEST: Name: ________________________________
___________________ Title: ________________________________
(Asst.) Secretary
[corporate seal]
JOHNSON ENGINEERING, INCORPORATED, a
Colorado Corporation
By: ________________________________
ATTEST: Name: ________________________________
___________________ Title: ________________________________
(Asst.) Secretary
[corporate seal]
FIRST UNION NATIONAL BANK, successor by
merger to Signet Bank, a Virginia banking
corporation
ATTEST: By: __________________________________
___________________ Michael J. Landini, Vice President
(Asst.) Secretary
[corporate seal]
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EXHIBIT A-1
FORM OF BORROWING BASE CERTIFICATE